Inputs Market Update: Fertilizer Declines as Margins Align

December 15, 2015 03:34 PM

 

Gains tallied $1.37 to Declines' $13.86 in the regional averages.

12152015PhosphateAfter firming a few dimes last week, anhydrous resumed its downward trajectory this week. Two weeks ago UAN32% dipped below parity with anhydrous ammonia and this week, UAN28% has followed suit. Urea crept back up to 2 cents above NH3 as the two went in different directions this week. We will have more on this in this week's TheNFiles, but UAN prices along with NH3 are doing their part to make planting corn more affordable.

Phosphates were lower together this week. We started to look at the average spread between retail DAP and MAP prices last week and according to our three and a half years of back data, that spread has averaged $22.51. This week the DAP/MAP spread is $21.45, just shy of the three year average. With nitrogen, we have noticed that thin margins between products has equated to a thinner spread between corn returns and nitrogen pricing. That may turn out to be the case for phosphate as well, although imports will continue to have sway near-term.

12152015UreaPotash keeps falling, down another $1.13 this week. Prices are fairly stable here with little movement from states to state overall.

Farm diesel is down a dime leading us to believe the downtrend will continue as it has in the entire energy sector. Those declines are helping to limit propane pricing, but seasonal price tendencies are strong for LP, and winter will likely spur mild increases where the mercury drops.

Corn Futures -- December 2016 corn futures closed Friday, December 11 at $3.96 putting expected new-crop revenue (eNCR) at $628.10 per acre -- lower $11.85/acre on the week. With anhydrous priced at $641.72 this week, the eNCR/NH3 spread widened 8.12 points and now stands at 13.62. This means one ton of anhydrous ammonia is priced at a $13.62 premium to expected new-crop revenue per acre.

Using USDA's January yield peg of 171 and steady basis, expected new-crop corn revenue based on March 2016 futures at Monday's open at $3.75 totals $641.25 per acre.

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Nutrient/Fuel
11/30/15
12/7/15
Week-over Change
Current Week
Nutrient/Fuel
Anhydrous
$645.01
$645.45
-$3.74
$641.72
Anhydrous
DAP
$538.56
$534.53
-$1.16
$533.37
DAP
MAP
$565.42
$555.70
-89 cents
$554.82
MAP
Potash
$418.25
$412.27
-$1.13
$411.14
Potash
UAN28
$293.97
$293.77
-$5.11
$288.67
UAN28
UAN32
$318.08
$317.94
-$1.73
$316.21
UAN32
Urea
$414.49
$410.91
$1.36
$412.26
Urea
Farm Diesel
$2.00
$1.96
-10 cents
$1.86
Farm Diesel
LP
$1.01
$1.03
1 cent
$1.04
LP
Composite
656.25
651.70
-2.94
648.75
Composite

 

12152015Indexes